Diesel generator set and natural gas generator sets (gensets) are the most widely adopted distributed energy resources on the planet, and they have been established as an industry for over a century. But as the global power equation shifts toward generation that is more distributed, clean, and intelligent, traditional markets for gensets are under threat even as new opportunities arise. Industry players that expand across the energy value chain into other distributed energy resources are more likely to gain market share as growth in some segments declines.

Customers continue to look to gensets to provide a reliable source of onsite power, but PV, battery storage, and natural gas (NG) are driving change in an industry historically dominated by diesel gensets. As customers adopt these technologies to save money or carbon emissions and environmental regulations continue to tighten, demand growth for diesel gensets is stagnating in some markets. Meanwhile, the growing availability of cheap NG is driving a shift toward gensets using that fuel. Developing economies undergoing rapid electrification still value the flexibility and efficiency of gensets, while countries across the economic spectrum are expected to adopt more grid-tied gensets to support the rapid growth of intermittent renewables. Genset deployment in microgrids and virtual power plants is also on the rise. According to Navigant Research, the market for new diesel generator sets and natural gas generator sets is expected to surpass $33 billion in annual revenue by 2026.

This Navigant Research report analyzes the global market for diesel and NG gensets for six segments: residential, commercial and industrial (C&I) standby, C&I prime and continuous, combined heat and power (CHP), utility, and resource extraction. The study examines key market and technology developments, as well as demand drivers and hurdles related to diesel and NG gensets. Global market forecasts for capacity and revenue, broken out by segment, region, and country, extend through 2026.